Investing.com – Crude oil futures added to losses on Tuesday, trading below USD99-a-barrel as the lack of progress in talks designed to reach a deal on the restructuring of Greek sovereign debt prompted investors to shun riskier assets.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD98.33 a barrel during early U.S. morning trade, tumbling 1.25%.
It earlier fell by as much as 1.35% to trade at a session low of USD99.28 a barrel.
On Monday, European Union finance ministers rejected demands by Greece’s creditors that new bonds to be issued in exchange for their existing Greek holdings will carry an interest rate of 4%, prolonging negotiations on the issue.
Greece needs to secure an agreement on restructuring its debt in order to secure new bailout funds and avert a default when a EUR14.4 billion bond redemption comes due on March 20.
Earlier in the day, ratings firm Standard & Poor’s declared that it was likely to put Greece into "selective default" once its protracted debt negotiations are concluded.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.55% to trade at 80.33.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Meanwhile, markets continued to monitor ongoing tensions between Iran and the West. The European Union's decision on Monday to ban Iranian crude imports supported prices during the Asian session, but the impact appeared to be short-lived as market participants said the ban had mostly been factored into prices during recent sessions.
The EU currently buys around 20% of Iran's oil exports with Greece, Spain and Italy the top buyers. Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010.
Oil traders were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 0.9 million barrels last week, the fourth consecutive weekly gain.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery declined 0.73% to trade at USD109.78 a barrel, with the spread between the Brent and crude contracts standing at USD11.45 a barrel.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD98.33 a barrel during early U.S. morning trade, tumbling 1.25%.
It earlier fell by as much as 1.35% to trade at a session low of USD99.28 a barrel.
On Monday, European Union finance ministers rejected demands by Greece’s creditors that new bonds to be issued in exchange for their existing Greek holdings will carry an interest rate of 4%, prolonging negotiations on the issue.
Greece needs to secure an agreement on restructuring its debt in order to secure new bailout funds and avert a default when a EUR14.4 billion bond redemption comes due on March 20.
Earlier in the day, ratings firm Standard & Poor’s declared that it was likely to put Greece into "selective default" once its protracted debt negotiations are concluded.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.55% to trade at 80.33.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Meanwhile, markets continued to monitor ongoing tensions between Iran and the West. The European Union's decision on Monday to ban Iranian crude imports supported prices during the Asian session, but the impact appeared to be short-lived as market participants said the ban had mostly been factored into prices during recent sessions.
The EU currently buys around 20% of Iran's oil exports with Greece, Spain and Italy the top buyers. Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010.
Oil traders were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 0.9 million barrels last week, the fourth consecutive weekly gain.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery declined 0.73% to trade at USD109.78 a barrel, with the spread between the Brent and crude contracts standing at USD11.45 a barrel.